United Parcel Service, Inc. (UPS) FY2025 10-K and Q2 FY2026 10-Q Summary

Business

From the FY2025 Annual Report on Form 10-K, accession 0001628280-26-008432.

UPS is a global package delivery and logistics provider serving more than 200 countries and territories. It moves express letters, documents, packages and palletized freight through a single, integrated air and ground network, and sells adjacent services around that network: contract logistics and distribution, ocean freight, airfreight forwarding, customs brokerage and shipment insurance. In 2025 it delivered an average of 20.8 million packages per day, 5.2 billion packages for the year, on total revenue of $88.7 billion. Founded in 1907, the company is incorporated in Delaware and headquartered in Atlanta, Georgia.

Segments. UPS reports two segments, U.S. Domestic Package and International Package, together its "global small package operations", with the remaining businesses grouped as Supply Chain Solutions ("SCS"), which does not meet the criteria of a reportable segment.

• U.S. Domestic Package. Time-definite, guaranteed air and ground small package delivery across substantially all business and residential ZIP codes in the contiguous U.S., including same-day, next-day, two-day and three-day air alternatives and air cargo. Ground volume alone runs approximately 15 million packages per day, most delivered within one to three business days. Ground Saver (formerly UPS SurePost) is the residential economy product for non-urgent, lightweight shipments.
• International Package. Small package operations across Europe, the Middle East and Africa ("EMEA"), Canada and Latin America ("Americas") and Asia, supported by in-house brokerage for cross-border clearance. Products range from guaranteed day- and time-definite express through UPS Worldwide Expedited, UPS Standard cross-border ground (intra-Europe, U.S.–Canada, U.S.–Mexico), contract-only Worldwide Economy and Worldwide Express Freight for urgent palletized shipments over 150 pounds.
• Supply Chain Solutions. Forwarding (one of the largest U.S. domestic airfreight carriers and airfreight forwarders globally, plus NVOCC ocean freight and customs brokerage); Logistics (multi-client and dedicated fulfillment and distribution facilities, with a strategic emphasis on healthcare and life-sciences cold chain); and digital and other businesses, Roadie (crowdsourced same-day delivery), Happy Returns (returns through The UPS Store network) and UPS Capital.

How it earns. Revenue is driven by volume and revenue per piece, with fuel surcharges applied on top. U.S. domestic air surcharges are indexed to the Department of Energy Gulf Coast kerosene-type jet fuel spot price and ground surcharges to the DOE On-Highway Diesel price, both adjusting weekly; international surcharges are indexed similarly by region of origin.

Network and assets. The global air hub is Worldport in Louisville, Kentucky, with international air hubs in Germany, China, Hong Kong, Canada and Florida. UPS owns or leases approximately 1,000 U.S. package facilities (~90 million square feet) and approximately 800 international package facilities (~23 million square feet), plus approximately 600 forwarding and logistics facilities (~50 million square feet), of which approximately 22 million square feet is healthcare-compliant warehousing. As of December 31, 2025 the fleet comprised 295 owned and/or operated aircraft plus 221 charters and leases operated by others, with 18 Boeing 767-300s on order, and a global ground fleet of approximately 125,000 package cars, vans, tractors and motorcycles, including approximately 19,000 alternative-fuel and advanced-technology vehicles. The MD-11 fleet was permanently grounded and retired in the fourth quarter of 2025, following the November 4, 2025 accident involving one of the company's MD-11 cargo aircraft at Louisville Muhammad Ali International Airport.

Workforce. Approximately 460,000 employees excluding temporary seasonal workers, 370,000 in the U.S. and 90,000 internationally, comprising roughly 75,000 management employees (nearly 35% part-time) and roughly 385,000 hourly employees (nearly 50% part-time). Nearly 80% of U.S. employees are unionized, primarily under a national master agreement with the International Brotherhood of Teamsters that expires July 31, 2028. Approximately 3,400 pilots are represented by the Independent Pilots Association under an agreement amendable since September 1, 2025; approximately 2,000 airline mechanics are covered by a Teamsters Local 2727 agreement amendable November 1, 2026; approximately 3,000 auto and maintenance mechanics are covered by an IAM agreement expiring July 31, 2029.

Customers and concentration. UPS served 1.6 million shipping customers and more than 10.7 million delivery recipients daily in 2025. One customer, Amazon.com, Inc. and its affiliates, represented approximately 10.6% of consolidated revenues in 2025, substantially all within U.S. Domestic Package. UPS's stated strategy is to reduce volume from this customer by more than 50% from 2024 levels by June 2026.

Strategy and recent portfolio actions. The company's stated strategy is Customer First, People Led, Innovation Driven, focused on healthcare, small and medium-sized businesses ("SMBs") and International. In 2025 SMB penetration rose to over 30% of total U.S. volume. UPS completed two healthcare acquisitions in 2025, Frigo-Trans and Biotech & Pharma Logistics ("Frigo-Trans"), a German complex healthcare logistics provider, in the first quarter, and Andlauer Healthcare Group ("AHG"), a North American third-party logistics and cold chain specialist, in the fourth quarter. The aggregate 2025 purchase price for all acquisitions was approximately $2.0 billion net of cash acquired, producing $1,344 million of goodwill and $763 million of intangibles (primarily $690 million of customer relationships amortized over a weighted average 15 years). The global healthcare portfolio generated more than $11 billion of revenue in 2025. Earlier, in September 2024, UPS divested its truckload brokerage business ("Coyote") for net cash proceeds of $1.0 billion and a pre-tax gain of $156 million; Coyote had contributed $1.6 billion of revenue in 2024 prior to divestiture. RFID labeling was extended to 5,500 UPS Store locations and RFID readers installed across U.S. package cars. In December 2025 UPS entered into an agreement with the United States Postal Service ("USPS") under which the USPS supports final-mile delivery for a portion of Ground Saver and Mail Innovations volumes beginning in 2026, a reversal of the January 2025 insourcing of the former SurePost product.

Regulation. Air operations fall under the DOT (economic regulation, international routes), the FAA (safety, certification, maintenance) and the TSA (air cargo security); UPS participates in the Civil Reserve Air Fleet program, under which the Department of Defense may requisition specified aircraft during a national defense emergency. Ground operations are regulated by the DOT and FMCSA and by state authorities. Customs brokerage and forwarding are regulated by Customs and Border Protection, the TSA, the Federal Maritime Commission and the DOT. The business is also subject to environmental, emissions, noise, data-protection (GDPR, China's Personal Information Protection Law, state U.S. privacy laws) and occupational health and safety regimes worldwide.

Risk factors

From the FY2025 Annual Report on Form 10-K, accession 0001628280-26-008432. The Q2 2026 Form 10-Q states there have been no material changes to these risk factors.

Business and operating

• Economic conditions. Operations in over 200 countries expose UPS to industrial production, inflation, unemployment, consumer spending, retail activity and trade policy, and to geopolitical tension in the European Union, Ukraine, the Russian Federation, the Middle East and the Trans-Pacific region.
• Competition and industry evolution. Competitors include U.S. and international postal services, motor carriers, express companies, freight forwarders, air couriers, large transportation companies, and e-commerce companies and retailers investing in their own logistics, some of which are also customers. Crowdsourcing-based start-ups and new technologies add further sources of competition; competitors may offer pricing terms UPS is unwilling to match.
• Customer concentration and the planned Amazon reduction. The deliberate volume glide-down from the largest customer (10.6% of 2025 consolidated revenues) requires matching reductions in facilities, vehicles, aircraft and workforce. Failure to make those adjustments or control the related costs could materially impact profitability, leaving stranded cost. Other large customers can also divert business, demand pricing concessions or build their own logistics capability, and certain significant contracts are terminable without cause on notice.
• Attracting and retaining employees. UPS depends on a large global workforce and hires many part-time and seasonal workers annually. The Network Reconfiguration and Efficiency Reimagined initiatives, which consolidate facilities and workforce, may themselves impair retention of experienced employees.
• Labor disruption. Strikes, work stoppages or slowdowns by unionized employees could cause permanent customer loss; customers have reduced business in the past on the mere expectation of such actions.
• Physical security and cybersecurity. Heightened government security requirements raise operating costs. UPS relies on IT for package-level data, routing, billing and financial reporting; its systems and those of franchisees, acquired businesses and third-party vendors have been and will remain susceptible to cyber-attack, ransomware, data exfiltration and state-sponsored attack. Increasing use of AI, which requires access to large volumes of sensitive data, is disclosed as intensifying this risk and as capable of producing inaccurate outputs. Cyber criminals have in the past gained access to customer accounts, fraudulently charged shipment fees and impersonated UPS by text message. The company states it is unaware to date of any material data breach or cybersecurity incident.
• Brand and reputation. Service quality issues, labor relations, safety, sustainability and political matters can damage brand equity, amplified by social media.
• Climate effects and severe weather. Meeting the disclosed goal of carbon neutrality in global operations by 2050 depends on technological advances beyond the company's control, including affordable sustainable aviation fuel and battery-electric vehicles. Severe weather and other natural or man-made disasters have disrupted operations; insurers may reduce availability or raise the cost of coverage.
• International operations in volatile emerging markets, subject to anti-corruption, sanctions and data-transfer laws.
• Acquisition integration. Realizing anticipated benefits depends on successful integration; delay or failure, or integration-related charges, could materially affect results.

Financial

• Fuel and energy prices. Fuel surcharges are the primary mitigant, but high surcharges have in the past pushed customers from higher-yielding to lower-yielding products or reduced volume outright. Energy supply disruption may arise from regulation, war, weather or producer action.
• Foreign exchange and interest rates. Most significant currency exposures are the Euro, British Pound Sterling, Canadian Dollar, Chinese Renminbi and Hong Kong Dollar. Interest rates affect short-term and floating-rate debt as well as the valuation of pension and postretirement obligations.
• Capital intensity. Aircraft, vehicles, technology, facilities and sortation equipment require large investment on uncertain forecasts; misjudging leads to excess or insufficient capacity.
• Benefit costs. Employee health, retiree health and pension expense is significant and has risen faster than inflation; UPS also participates in trustee-managed multiemployer pension and health and welfare plans whose future contribution rates are set through collective bargaining and cannot currently be estimated.
• Insurance and claims. A combination of self-insurance and high-deductible programs covers cargo loss, cyber-attack, personal injury, property damage, aircraft liability, business interruption and workers' compensation; reserves rest on actuarial assumptions subject to high variability.
• Impairment. While no goodwill impairment was recorded in 2025 or 2024, certain reporting units saw the excess of fair value over carrying value decline in each year. UPS recorded $182 million of asset impairment charges in the fourth quarter of 2025. Network changes begun in 2025 have led, and may further lead, to revisions in asset useful lives or salvage values.
• Tax. UPS is regularly under audit in many jurisdictions; outcomes could differ materially from historical provisions and accruals.

Regulatory and legal

• Complex and stringent laws, including tariff and trade policy, export requirements, embargoes and sanctions, whose trajectory the company describes as unpredictable.
• Climate regulation. The EU's ReFuelEU Aviation initiative mandates a sustainable aviation fuel ("SAF") share at EU airports beginning at 2% in 2025 and rising to 70% by 2050, with SAF costs passed through to purchasers. Non-CO2 aviation effects must be monitored and reported for certain EU routes beginning in 2025. CORSIA moves to mandatory participation in 2027. In January 2026 the U.S. withdrew from the Paris Climate Accords, with uncertain effect on future U.S. policy.
• Claims and litigation arising from labor and employment, personal injury, property damage, business practices and environmental liability.

Management's discussion, fiscal year 2025

From the FY2025 Annual Report on Form 10-K, accession 0001628280-26-008432. UPS's fiscal year is the calendar year ended December 31.

Consolidated result. Revenue fell 2.6% to $88,661 million from $91,070 million. Operating expenses declined 2.2% to $80,794 million, but operating profit fell 7.1% to $7,867 million and operating margin contracted 40 basis points to 8.9%. Net income was $5,572 million (down 3.6%) and diluted EPS $6.56, against $6.75 in 2024. Average daily package volume fell 7.0% to 20,847 thousand pieces; average revenue per piece rose 6.6% to $14.50. There were 252 operating days versus 253.

Diluted EPS of $6.56 included $0.30 per share from gains on sale-leaseback transactions involving SCS real estate. Non-GAAP adjusted diluted EPS was $7.16, after excluding, on an after-tax basis, Transformation Strategy Costs of $452 million ($0.53 per share), Goodwill and Asset Impairment Charges of $156 million ($0.18 per share, including $137 million related to the MD-11 retirement), a Net Loss on Divestiture of $15 million ($0.02), and a Reversal of an Income Tax Valuation Allowance of $(109) million ($(0.13)). The blended average effective tax rates were 23.4% in 2025 and 24.1% in 2024.

What drove it. Volume declined on the planned glide-down from the largest customer and on revenue-quality actions taken against certain e-commerce volume; revenue fell further on the Coyote divestiture and lower Mail Innovations volume, partly offset by International Package growth, air cargo revenue from full onboarding of the USPS contract in Q4 2024, and healthcare logistics. Revenue per piece rose on customer and product mix and pricing actions. Operating profit fell mainly on higher U.S. pickup and delivery expense and a shift of international volume onto less profitable trade lanes under changing trade policy.

Transformation programs. Transformation 2.0 was completed in 2025 at total cost of $835 million. Fit to Serve was completed in 2025 at total cost of $463 million, delivering roughly $1.0 billion of savings from a workforce reduction of approximately 14,000 positions, primarily management. Network Reconfiguration and Efficiency Reimagined, an expansion of Network of the Future, reduced the operational workforce by approximately 48,000 positions (including 15,000 fewer seasonal positions) and closed daily operations at 93 leased and owned buildings, 85 of them permanently in 2025, with 24 more identified for closure in the first half of 2026. The program delivered approximately $3.5 billion of year-over-year cost savings in 2025 at total incurred program cost of $544 million ($509 million in 2025), and management expected approximately $3 billion of savings in 2026, with the initiatives concluding by 2027. Separately, $58 million of accelerated depreciation and asset retirement obligations and $72 million of gains on property sales arose from closed facilities in 2025.

U.S. Domestic Package. Average daily volume fell, with business-to-consumer down 12.5% and business-to-business down 2.8%; air volume fell 11.7% and ground 8.1%. Revenue per piece rose 7.1%, reflecting the full-year effect of the average 5.9% net rate increase implemented in December 2024; a further average 5.9% net increase took effect in December 2025. Fuel surcharge revenue rose $282 million. Compensation and benefits rose $539 million, largely from the additional stops created by insourcing Ground Saver, and air cargo expense rose $430 million on the USPS contract. Cost per piece rose 8.1% (7.2% on a non-GAAP adjusted basis). Operating profit fell $419 million and margin fell 60 basis points to 6.6%; non-GAAP adjusted operating profit rose $88 million with adjusted margin up 20 basis points to 7.7%.

International Package. Revenue grew 3.4%. Domestic average daily volume rose 1.4% and export volume 3.5%, led by EMEA, offset by China-to-U.S. declines following trade policy changes effective in the second quarter of 2025. Revenue per piece rose 1.1% overall, domestic up 5.8%, export down 0.6%. Pickup and delivery expense rose $460 million on higher volume, merit increases and the launch of weekend delivery in Europe; integrated air and ground network costs rose $327 million. Operating profit fell $318 million and margin fell 230 basis points to 15.5%; adjusted operating profit fell $425 million with adjusted margin down 290 basis points to 15.8%.

Supply Chain Solutions. Forwarding revenue fell $1.8 billion, of which $1.6 billion was the Coyote divestiture and $245 million organic decline on soft air and ocean demand and China-to-U.S. tariff effects. Logistics revenue fell $582 million, with Mail Innovations down $904 million on revenue-quality-driven volume declines, partly offset by $303 million of healthcare logistics growth from Frigo-Trans, AHG and organic expansion. Other SCS businesses grew $226 million on Roadie and UPS Capital. Operating profit rose $136 million with margin up 280 basis points to 10.1% (adjusted margin up 260 basis points to 10.6%), helped by $330 million of sale-leaseback gains.

Consolidated cost lines. Total compensation expense rose $182 million; direct labor rose $410 million while management compensation fell $242 million. Benefits rose $330 million, including $212 million more separation cost, $143 million more health and welfare and $127 million more workers' compensation, against a $242 million decline in pension and other postretirement cost. Purchased transportation fell $3.0 billion, $1.3 billion from Coyote and $1.3 billion from insourcing Ground Saver and lower volume. Fuel expense fell $50 million. Other occupancy rose $152 million. Other expenses rose $275 million, including the $182 million MD-11 retirement charge, $160 million of higher professional fees and $138 million of higher DAP commissions, partly offset by $434 million of sale-leaseback and real estate gains versus $77 million of net gains in 2024.

Liquidity. UPS held $5.9 billion of cash, cash equivalents and marketable securities at December 31, 2025, approximately $2.0 billion of it at foreign subsidiaries. Net cash from operating activities fell $1.7 billion on unfavorable working capital (lower payables on reduced U.S. volume, higher incentive compensation payments, higher income tax payments against a 2024 Hurricane Helene deferral) and lower net income, partly offset by $730 million of cash proceeds from a newly established accounts receivable factoring program. Capital expenditures were $3.7 billion (versus $3.9 billion), with approximately $430 million tied to environmental sustainability projects; 2026 capital expenditures were guided to approximately $3.0 billion, about 80% for network enhancement and technology. Disposal proceeds of $465 million came mainly from SCS real estate sale-leasebacks and a data center. Debt issuance of $4.2 billion in senior notes was set against $2.1 billion of repayments. UPS repurchased 8.6 million Class B shares for $1.0 billion and paid $5.4 billion of dividends, returning $6.4 billion in total; the quarterly dividend was $1.64 per share. Contributions to company-sponsored U.S. pension and postretirement medical plans of approximately $1.3 billion were anticipated for 2026, plus approximately $574 million to the UPS 401(k) Savings Plan. Leases entered during 2025 required parent company guarantees of approximately $1.8 billion. Estimated future interest payments on outstanding debt total approximately $20.9 billion.

Goodwill sensitivity. At the July 1, 2025 testing date, approximately $877 million (Global Freight Forwarding, "GFF") and $738 million (Healthcare Logistics and Distribution, "HLD") of the $4.8 billion consolidated goodwill balance sat in reporting units whose fair value exceeded carrying value by only a limited margin. Management disclosed that a 100 basis point increase in discount rate or a 10% reduction in projected cash flows could reasonably make either unit impaired. An interim quantitative test on GFF in the fourth quarter of 2025 again found a limited excess and no impairment. Approximately $295 million of goodwill sits in the Mail Innovations reporting unit, which experienced cost increases above expectation from the first quarter of 2025 after a primary vendor contract expired, the pressure the December 2025 USPS agreement is intended to relieve.

Current quarter, second quarter and first half of 2026

From the Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, accession 0001628280-26-053249, except where noted.

The quarter in one line: revenue and adjusted profit both grew for the first time in this cycle, while GAAP profit collapsed on a $1.1 billion voluntary separation charge.

Consolidated. Revenue rose 7.6% to $22,834 million for the quarter and 3.0% to $44,036 million for the first half. Operating expenses rose 12.9% to $21,904 million (up 6.5% to $41,839 million year to date), so operating profit fell 49.0% to $930 million for the quarter (down 37.0% to $2,197 million year to date) and operating margin fell 450 basis points to 4.1% (down 320 basis points to 5.0% year to date). Net income was $604 million and diluted EPS $0.71, against $1,283 million and $1.51 a year earlier; first-half net income was $1,468 million and diluted EPS $1.73. Non-GAAP adjusted diluted EPS was $1.76 for the quarter and $2.82 year to date, after excluding after-tax transformation strategy costs of $891 million ($1.05 per share) in the quarter and $933 million ($1.09) year to date. Average daily package volume fell 3.7% to 19,006 thousand and average revenue per piece rose 11.3% to $15.96. The effective tax rate was 20.6% for the quarter versus 22.8%.

The two swing factors. First, the Driver Choice Program, a voluntary separation program under the Network Reconfiguration and Efficiency Reimagined initiatives, produced approximately $1.1 billion of separation costs in the second quarter, the bulk of the $1,172 million of total transformation strategy costs recognised in the quarter ($1,227 million year to date). Second, the Middle East conflict drove fuel prices, charter utilisation and network disruption costs sharply higher: consolidated fuel expense rose $639 million for the quarter (up $664 million year to date), and it also lifted fuel surcharge revenue, which is a substantial part of the reported revenue growth.

Strategic milestones in the quarter. The planned reduction of volume from the largest customer was completed during the quarter, at more than 50% below 2024 levels. The outsourcing of last-mile delivery for a portion of Ground Saver to the USPS progressed, a reversal of the 2025 insourcing that raises purchased transportation fees while removing labor hours. In the first half UPS closed 45 leased and owned buildings, 44 permanently, and realised approximately $1.2 billion of program benefits from Network Reconfiguration and Efficiency Reimagined, against a full-year expectation of approximately $3 billion of benefits and $1.3–$1.5 billion of excluded cost. Cumulative program cost through June 30, 2026 was $1.8 billion, including $1.2 billion in 2026; the initiatives are expected to conclude by 2027. AHG integration continued alongside investment in temperature-controlled cross-dock facilities; internationally UPS expanded its Incheon, South Korea hub, opened a logistics center in Taiwan and worked to improve European ground transit times.

U.S. Domestic Package. Revenue rose 6.0% to $14,930 million for the quarter (up 1.8% to $29,055 million year to date) as average daily volume fell 3.3% and revenue per piece rose 9.3%. Fuel surcharge revenue rose approximately $575 million for the quarter (approximately $721 million year to date). Business-to-consumer volume fell 3.5% and business-to-business 3.2%. Compensation and benefits rose $864 million on the Driver Choice Program charge; facility and transportation costs rose $602 million, chiefly on USPS fees for outsourced Ground Saver. Cost per piece rose 16.8% (adjusted cost per piece up 8.0%). GAAP operating profit collapsed to $16 million (margin 0.1%) from $916 million, but non-GAAP adjusted operating profit rose 21.0% to $1,188 million and adjusted margin expanded 100 basis points to 8.0%, the clearest evidence in the filing that the underlying U.S. cost structure has re-based.

International Package. Revenue rose 12.5% to $5,044 million as revenue per piece rose 18.9% against a 5.8% decline in average daily volume (domestic down 7.5%, export down 4.2%). Fuel surcharge revenue rose $429 million, attributed to the Middle East conflict. Export declines came from EMEA intra-regional movements and U.S. destination lanes affected by trade policy including de minimis exclusions, partly offset by higher Asia-to-U.S. demand as the elimination of de minimis in May 2026 was lapped. Operating expenses rose $608 million, including a $482 million rise in integrated air and ground network costs. Operating profit fell 7.3% to $623 million and margin fell to 12.4% from 15.0%.

Supply Chain Solutions. Revenue rose 7.8% to $2,860 million (up 0.6% to $5,397 million year to date). Forwarding rose $59 million on higher international airfreight rates. Logistics rose $64 million, as a $232 million increase from healthcare logistics, driven by the fourth-quarter 2025 AHG acquisition and additional customer demand, outweighed a $186 million decline in Mail Innovations. Other SCS rose $84 million on digital growth. Operating profit rose 24.4% to $291 million, with margin up to 10.2% from 8.8%; first-half operating profit rose 77.1% to $496 million.

Other cost lines. Purchased transportation rose $665 million for the quarter, with ground up $362 million (mainly USPS Ground Saver fees) and air carrier expense up $175 million from leased aircraft covering the capacity gap left by the MD-11 retirement plus charter utilisation during Middle East network disruption. Depreciation and amortization rose on capital additions, building closures and AHG. Other expenses rose $82 million, including $53 million of DAP growth and $42 million of technology cost, partly offset by $52 million of higher property and aircraft-parts sale gains. Interest expense rose $34 million to $272 million on higher average debt balances and finance lease costs; investment income rose $25 million to $103 million on higher pension income.

Fleet. Two aircraft were temporarily idled at June 30, 2026 for an average of approximately six months and were expected back in service in the third and fourth quarters of 2026. Five Boeing 767-300 aircraft were delivered in the first half under finance leases, beginning to reduce the third-party lease expense incurred after the MD-11 retirement.

Liquidity and capital. Cash, cash equivalents and marketable securities were $4.7 billion at June 30, 2026, approximately $2.0 billion held by foreign subsidiaries. Net cash from operating activities rose $417 million to $3,083 million, helped by approximately $200 million of timing on pass-through IEEPA tariff refunds, lower tax payments and lower pension contributions, and reduced by lower net income and a $2.0 billion increase in receivables tied to the factoring program. Capital expenditures were $1,724 million (3.9% of revenue) versus $1,999 million, with the full-year plan held at approximately $3.0 billion. No acquisitions were completed in the first half. There were no debt issuances in the half and $85 million of repayments; total debt outstanding was $24,484 million against shareowners' equity of $15,099 million. No shares were repurchased in 2026, $1.3 billion remained available under the January 2023 $5.0 billion authorization at June 30, 2026, while $2,708 million of dividends were paid at $1.64 per share quarterly. Commercial paper outstanding was nil at quarter end. $500 million of fixed-rate senior notes mature in 2026. Aircraft lease parent company guarantees stood at approximately $1.8 billion.

Tariff refunds and litigation. On February 20, 2026 the U.S. Supreme Court invalidated certain tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"). CBP stopped collecting IEEPA tariffs on February 24, 2026 and launched Phase 1 of an administrative refund process on April 20, 2026. UPS has filed and received CBP approval for approximately $500 million of IEEPA tariffs paid on eligible entries, recorded in Other current liabilities; approximately $200 million of approved refunds had been received and approximately $300 million recorded in Accounts receivable at June 30, 2026. UPS continues to evaluate options for the balance, which CBP is not currently processing, and notes the outcome depends on further court interpretation, CBP and regulatory developments, legislative responses and the recoverability of receivables from customers. Separately, contingencies of $104 million for environmental remediation, with corresponding insurance recoveries in receivables, were recorded in connection with the November 2025 cargo aircraft accident at Louisville Muhammad Ali International Airport; further claims and proceedings arising from that incident could result in additional charges and recoveries that cannot presently be estimated. In June 2026 the Spanish Supreme Court affirmed the CNMC's 2018 decision in the parcel-industry customer-allocation matter; UPS intends to appeal further and considers the fine immaterial. The Baker USERRA class action was settled for an immaterial amount; the Malone Pennsylvania overtime class action, certified in December 2025, is being defended with no loss estimate available.

Outlook. In its second-quarter earnings release issued July 28, 2026 (furnished on Form 8-K, accession 0001628280-26-049912), UPS raised full-year 2026 guidance to approximately $91.2 billion of consolidated revenue, approximately $8.65 billion of non-GAAP adjusted consolidated operating profit and approximately $7.22 of non-GAAP adjusted diluted EPS. The company confirmed expected capital expenditures of about $3.0 billion, dividend payments of around $5.4 billion subject to board approval, and an effective tax rate of approximately 23.0%. Non-GAAP adjusted consolidated operating margin for the quarter was 9.2%. Chief Executive Officer Carol Tomé characterised the quarter as marking "an expected and significant shift in our performance" following the completion of the Amazon glide-down and related network reconfiguration.

Subsequent events

Neither the FY2025 Form 10-K nor the Q2 2026 Form 10-Q contains a subsequent-events note. The material developments disclosed after the June 30, 2026 period end appear in current reports on Form 8-K.

• $1.0 billion of 4.850% Senior Notes due 2031. On August 10, 2026 UPS entered into an underwriting agreement to sell $1,000,000,000 principal amount of 4.850% Senior Notes due 2031. Of that amount, the company intended to contribute $200,000,000 principal to the UPS Retirement Plan Trust, a pension trust funding only the UPS Retirement Plan, and $250,000,000 principal to the Master Trust, which funds three defined benefit pension plans including the UPS Pension Plan. Net proceeds of the remainder were designated for general corporate purposes; UPS will not receive proceeds from the portion of the notes redelivered to the trusts. (Form 8-K filed August 12, 2026, accession 0001104659-26-094502.)
• $325.105 million of Floating Rate Senior Notes due 2076. On August 14, 2026 UPS entered into an underwriting agreement to sell $325,105,000 aggregate principal amount of Floating Rate Senior Notes due 2076, bearing interest at the greater of Compounded SOFR less 0.350% and 0.00%, with net proceeds designated for general corporate purposes. (Form 8-K filed August 18, 2026, accession 0001104659-26-098351.)
• Senior leadership change in International, Healthcare and Supply Chain Solutions. On August 31, 2026 UPS announced that Kate Gutmann, Executive Vice President and President, International, Healthcare and Supply Chain Solutions, would retire from those positions effective September 1, 2026, remaining in a transitional role through March 31, 2027. Wilfredo Ramos, previously President Asia Pacific Region, Global Brokerage, Customer Solutions and Global Revenue Operations, was appointed Executive Vice President and Chief International, Healthcare and Supply Chain Solutions Officer, and Nando Cesarone moved from Executive Vice President and President U.S. to Executive Vice President and Chief Global Operations Officer. (Form 8-K filed August 31, 2026, accession 0001628280-26-059609.)

No acquisitions, divestitures or litigation settlements were disclosed after the period end.